On June 2, 2023, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued an interim rule amending the Federal Acquisition Regulation (FAR) to implement the No TikTok on Government Devices Act. Federal Acquisition Regulation: Prohibition on a ByteDance Covered Application, 88 Fed. Reg. 36430-02 (June 2, 2023). The interim rule requires the use of a new contract clause, FAR 52.204-27, in federal contracts. The clause prohibits prime contractors and subcontractors at all tiers from having or using the social networking service TikTok on information technology used in the performance of a federal contract.
While the No TikTok on Government Devices Act did not require modifications to the FAR, the statute directed the Director of the Office of Management and Budget (OMB) to coordinate with other agency heads to “develop standards and guidelines for executive agencies requiring the removal of any covered application from information technology.” Pub. L. 117-328, Div. R, § 102(b)(1). The statute also defined “information technology” as including equipment “used by a contractor under a contract with [an] executive agency that requires the use—(i) of that equipment; or (ii) of that equipment to a significant extent in the performance of a service or the furnishing of a product”. Id.
On February 27, 2023, OMB “direct[ed] agencies to remove TikTok from Federal devices” and provided guidance requiring conforming changes to federal contracts to implement the prohibition. See OMB Memorandum M-23-13, at 1 (Feb. 27, 2023), available at https://www.whitehouse.gov/wp-content/uploads/2023/02/M-23-13-No-TikTok-on-Government-Devices-Implementation-Guidance_final.pdf.
New Contract Clause (FAR 52.204-27) Prohibition
The new contract clause prohibits “the presence or use of [TikTok] on executive agency information technology, including certain equipment used by Federal contractors. The Contractor is prohibited from having or using [TikTok] on any information technology owned or managed by the Government, or on any information technology used or provided by the Contractor under [the] contract, including equipment provided by the Contractor’s employees.” FAR 52.204-27(b). On its face, this sounds like a broad prohibition. The term “information technology,” however, is narrowly defined by the statute and the FAR clause to include only (1) equipment required for use under the contract or (2) equipment used by a contractor pursuant to a contract that requires the use of that equipment to a significant extent in the performance of the contract. Also notable is the fact that the definition of “information technology” does not include “any equipment acquired by a Federal contractor incidental to a Federal contract.”
The statute and the interim rule are significantly more narrow than contracting restrictions under FAR 52.204–25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment or FAR 52.204–23, Prohibition on Contracting for Hardware, Software and Services Developed or Provided by Kaspersky Lab and Other Covered Entities, both of which represented broad and comprehensive statutory restrictions on the use of equipment or components from specific companies by all federal contractors. Even the preamble to the interim rule notes: “The changes made in this rule are less complex than other prohibitions that have been incorporated into the FAR, such as the prohibition on contracting for certain telecommunications and video surveillance services or equipment, which requires reviewing a contractor’s supply chain to uncover any prohibited equipment or services.”
As federal prime contractors and subcontractors work to implement this clause, it is notable that the prohibition does not apply to all information technology used by the contractor. Information technology that is used primarily for commercial business or owned by employees is only covered by the prohibition if the equipment is used to a “significant extent” in the performance of the federal contract. Equipment that is acquired by a federal contractor “incidental” to the contract is not covered by the prohibition. This definition and its exclusion should permit tailored contractor policies implementing the restrictions imposed by the clause.
Commercial prime contractors and subcontractors with minimal amounts of federal work have strong arguments that a complete ban of the use of TikTok within the corporation is not required or necessary to meet the requirements of this clause. It would be equally unnecessary for companies to require employees to remove TikTok from personal devices if these employees are not using their devices to a significant extent to perform federal contracts.
Contracting Officer Process for Incorporation of FAR 52.204-27
Federal contracting officers are required to include FAR 52.204–27 in solicitations issued on or after June 2, 2023, and awards occurring after June 2, 2023. Open solicitations were required to be modified to include the clause by July 3, 2023. For existing indefinite-delivery contracts only, contracting officers were required to modify the contract to include FAR 52.204–27 by July 3, 2023. When exercising an option or modifying an existing contract or task or delivery order to extend the period of performance, contracting officers are also required to include the clause.
Flow Down to Subcontractors
Contractors at all tiers are required to insert the substance of the clause in all subcontracts, including subcontracts for the acquisition of commercial products or commercial services.
Contracts Below Micro-Purchase Threshold
For purchases at or below the micro purchase ceiling that may involve social media advertising services as part of the procurement, the prohibition on TikTok will apply to the purchase. However, the prohibition will generally not apply to micro-purchases.